Further concentration in Europe

The process of concentration in the DIY markets has received further impetus this year. It began in Germany with the bankruptcy of the Praktiker Group. Just two years ago the company was still number three in the German market and operated more than 430 stores in seven European countries. The dire economic situation in Europe in the last few years has caused other DIY chains of all sizes to encounter serious problems and appears ultimately to favour the big players.
In Russia, for example, where the DIY market has become accustomed to double-digit growth rates over the years, several quite well-known chains have given up the struggle in the last year. We report on their departure in this issue (page 14).
And in the difficult market in south-eastern Europe, a number of players have succumbed to the tendency to implode. The highest-profile victim is the Austrian market leader Baumax, which has now sold its Romanian business in its entirety to the European market leader, the French Groupe Adeo. The French Bricostore chain had already withdrawn from Romania, handing its stores over to Adeo’s rival Kingfisher.

A year ago, the British group had to surrender its number one spot in the rankings of European DIY retailers to the French, who have significantly widened the gap since then. The Romanian acquisition by no means restores the company to the top slot it relinquished, but another deal is imminent: Kingfisher is currently in negotiations with Mr Bricolage, the third biggest player in the French market, which also operates in a large number of foreign markets.
The question nevertheless arises of whether the extreme concentration we are now seeing is the consequence of an immutable law of nature. Anyone attending the big DIY business congress in Madrid, which is reported in detail in this issue (pages 20 to 29), may think long and hard about this. The changes in customer behaviour outlined there can only be described as “rapid”. And we may well ask if these big enterprises in particular will be fast enough always to react sufficiently flexibly to the flexible customer in the future. Rainer Strnad Managing editor P. S.: You can now follow the development of the European sector even more closely with the newly published Dähne Statistics DIY…